What Neuroscience Reveals About Buying Decisions
- How do customers assess prices during decision-making?
- Can our perceived value be influenced by invisible factors?
Researchers at Duke University did a study to see whether consumers evaluate products in a rational manner. They asked subjects how much they would pay for a bottle of wine. Before that, though, they asked the subjects to write down the last two digits of their social security number.
Surprisingly, those who wrote down higher numbers were willing to pay 200-300% more than those who wrote down lower numbers. The perceived value was determined by a completely unrelated number. This finding reveals the important role of the unconscious mind in our buying decisions.
Understanding Consumers’ Decision-Making
Over the past 100 years, advertising agencies have been trying new ways to sell. Some of them have worked, but many have failed miserably. Most people remember the “New Coke” debacle. Coca Cola launched a new product and spent tens of millions of dollars promoting its new taste. The attempt was an utter failure. Consumers simply rejected “New Coke” because it was not just the taste that drew Coke lovers to the brand.
From Ford’s Edsel to Sony’s Betamax video recorder, costly marketing flops are easy for most people to recall. What all marketing failures have in common is a lack of knowledge of the consumer’s decision-making process. Neuroscientists have helped us learn what makes consumers buy, using brain-imaging technology. Consumers make most decisions quickly and subconsciously, without much thinking. Understanding why people decide what to do and what not to do can help businesses avoid costly mistakes. Triggering your customers’ buying decisions can drive up your sales and profits.
- How Are Most of Our Decisions Made? – We all make constant decisions every day. If we took the time to carefully think about most of them, we’d have time for little else. So, we automatically decide most things, without even realizing it. 95% of our daily decisions are made unconsciously, out of habits.We buy products that we have bought in the past and from the store that we have bought from before. Our online shopping behavior is the same. Many people are familiar with Amazon. So, Amazon has become the place to shop without considering other stores. Our shopping experiences involve dozens of primarily fast-thinking processes.
- How Fast Thinking Rules Our Decision-Making – Research by Nobel Prize winner Daniel Kahneman led him to categorize decision-making into fast and slowing thinking systems. The fast-thinking system makes most decisions quickly, automatically, and unconsciously. It relies on intuition, habitual behavior patterns and emotional responses. We’re not normally aware of making those decisions. They are triggered by subtle cues that generate fear, pleasure, desire and instant recall of old memories. Smell, color, temperature and sound often shape our fast buying decisions without our awareness.On the internet, such fast decisions include clicking buttons or links, leaving a website, or looking for more information.
- How Slow Thinking Helps Make Complex Decisions – For more important decisions, our brain shifts gears. It slows down and uses our analytical capability to solve problems. This slow decision-making process involves weighing alternatives and applying logical, conscious reasoning. The shift from fast to slow thinking takes place constantly. Researchers using brain imaging can observe this happening during experimental studies.
When we compare products on a website, think about the pros and cons of a decision, or calculate costs and benefits, we’re using slow thinking to reach decisions.Triggering this shift into analytical thinking is a crucial aspect of Neuromarketing. Web content, both visual and textual, supplies those triggers. It also presents the information that feeds the logical mind.
- How Fast and Slow Thinking Interact to Make Decisions – Fast and slow thinking work together constantly. A buying decision starts with establishing unconscious emotional connections to the product or service. How what we buy makes us feel is much more important than what it does for us. Those fast, unconscious feelings keeps a buyer interested and engaged in the buying process. For expensive products or services, the slow, logical thinking process kicks in to analyze more information. Analytical thinking is important. However, our brains can’t conduct a very thorough analysis because we can never have all the facts available.In the end, whether it is an online or offline purchase, we rely on our emotions to decide. This explains why trust is a crucial factor in consumers’ decisions.
- How Emotions Overpower Analysis – Most consumers take pride in careful thinking before making decisions. They do their research, compare products, consider competing businesses, and think about their choices. They have a budget in mind. But what really happens when they make the buying decision? Often, they let emotions take over and make the final decision, unconsciously.For example, let’s say an online shopper wants to buy a 48″ TV for $600. After comparing features, prices, shipping cost and brands, he thinks he’s found just the right one. A purchase decision is made. Then, the shopping cart page also shows him a bigger 60″ model at a higher price point, but with free two-day shipping and a free HDMI cable. The shopper is ready to buy the smaller, less-expensive model, but he is distracted by the larger size and the free offers. In many cases, the unconscious brain takes control and makes an emotion-driven choice.
- Tap into Fast and Slow Thinking to Increase Sales Conversion – Convincing a shopper to buy is complex. Neuroscience research shows that both quick and slow thinking constantly switch back and forth during decision-making. Fast thinking is primarily involved in unconscious decisions about what to pay attention to.Online, it often triggers clicking on paid ads and search engine listings. Once a visitor arrives on a website, quick decisions control retention and navigation decisions. After the visitor begins exploring, the analytical mind takes in information, performs comparisons and decides whether to buy. A well-designed website utilizes Neuromarketing techniques throughout to engage and stimulate both thinking processes. If it is successful, conversion is the result. For offline sales, the same process takes place inside shoppers’ brains as well. Effective Neuromarketing will produce 100% to 500% higher sales conversion rates.
Power Up Your Sales Conversion with Neuroscience
The phenomenal success of the best-known online businesses is due in part to applied Neuromarketing research. Over the past decade, Neuromarketing has become a primary guiding force. Although unnoticeable by the average consumer, its subtle impact on sales and conversions is remarkable. Many of the recent design changes on Amazon, Facebook and countless corporate websites are powered by Neuroscience research. The effect on profitability can be dramatic.
Smaller businesses, too, are recognizing the need for these techniques. Many are trying to implement Neuromarketing on a piecemeal basis. After only spotty results, though they’re turning to the few Neuromarketing firms for help. These scientific approaches work best when integrated throughout an overall marketing plan.